UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _____
Commission file number 2-55070
THE ANDERSONS
(Exact name of registrant as specified in its charter)
OHIO 34-4437884
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
480 W. Dussel Drive, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
(419) 893-5050
(Telephone Number)
1200 Dussel Drive, Maumee, Ohio
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No___
The registrant is a limited partnership and has no voting stock. Because of
its form or organization, that includes transfer restrictions, there is no
market for any partnership interest in the registrant.<PAGE>
THE ANDERSONS
INDEX
Page No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets -
March 31, 1994 and December 31, 1993 . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income -
Three months ended March 31, 1994 and 1993 . . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 1994 and 1993 . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . .10
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . .10
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE ANDERSONS
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
1994 1993
(UNAUDITED) (NOTE)
CURRENT ASSETS
Cash and cash equivalents $ 3,402,506 $ 3,936,955
Accounts Receivable:
Trade accounts - net 59,303,656 60,036,382
Margin deposits 2,501,853 15,320,979
61,805,509 75,357,361
Inventories:
Grain 96,825,968 135,346,670
Agricultural products 29,179,088 16,170,908
Merchandise 37,030,487 32,497,574
Lawn products and corn cob products 19,793,422 20,579,022
Supplies and other 7,936,480 6,429,477
190,765,445 211,023,651
Prepaid expenses 1,321,302 858,941
TOTAL CURRENT ASSETS 257,294,762 291,176,908
OTHER ASSETS
Investments in and advances to affiliates 1,609,082 942,053
Investments and other assets 3,806,832 3,965,729
TOTAL OTHER ASSETS 5,415,914 4,907,782
PROPERTY, PLANT AND EQUIPMENT
Land 10,585,139 9,457,460
Land improvements and leasehold improvements 19,908,069 19,378,810
Buildings and storage facilities 64,790,152 62,022,387
Machinery and equipment 80,936,811 80,141,615
Construction in progress 2,329,685 1,707,564
178,549,856 172,707,836
Less allowances for depreciation and
amortization 113,667,378 112,290,748
NET PROPERTY, PLANT AND EQUIPMENT 64,882,478 60,417,088
$327,593,154 $356,501,778
NOTE: The balance sheet at December 31, 1993 has been derived from the audited
financial statements at that date.
See notes to condensed consolidated financial statements.
THE ANDERSONS
CONDENSED CONSOLIDATED BALANCE SHEETS - (continued)
March 31 December 31
1994 1993
(UNAUDITED) (NOTE)
CURRENT LIABILITIES
Notes payable $113,400,000 $ 87,900,000
Accounts payable for grain 19,199,203 83,712,076
Other accounts payable 63,091,476 58,896,317
Amounts due General Partner 3,549,257 4,173,287
Accrued expenses 6,404,408 7,496,181
Current maturities of long-term debt 2,559,000 1,992,000
TOTAL CURRENT LIABILITIES 208,203,344 244,169,861
LONG-TERM DEBT
Note payable, 5.00%, payable $800,000
annually, due 1997 6,800,000 6,800,000
Notes payable relating to revolving credit
facility, variable rate (4.55% at
3/31/94), due 1996 10,000,000 7,500,000
Note payable, variable rate (5.1875% at
3/31/94) payable monthly through 7/5/96 5,133,088 -
Other notes payable 439,670 888,409
Industrial development revenue bonds:
6.5% due 1999 5,000,000 5,000,000
Variable rate (4.19% at 3/31/94),
due 1995 to 2004 8,114,000 8,114,000
Variable rate (2.29% at 3/31/94), due 2025 3,100,000 3,100,000
Debenture bonds:
9.2% to 11.4%, due 1995 and 1996 7,571,000 7,586,000
6.5% to 7.2%, due 1997 to 1999 5,158,000 4,894,000
10% to 10.5%, due 1997 and 1998 2,849,000 2,849,000
10% due 2000 and 2001 2,747,000 2,774,000
7.5% to 8.5%, due 2002 to 2004 4,297,000 4,061,000
Other bonds, 4% to 9.6% 733,294 684,711
61,942,052 54,251,120
Less current maturities of long-term debt 2,559,000 1,992,000
TOTAL LONG-TERM DEBT 59,383,052 52,259,120
AMOUNT DUE GENERAL PARTNER 2,465,766 2,413,041
DEFERRED GAIN 22,259 1,145,151
MINORITY INTEREST 875,762 1,103,892
PARTNERS' CAPITAL
General partner 790,777 761,839
Limited partners 55,852,194 54,648,874
TOTAL PARTNERS' CAPITAL 56,642,971 55,410,713
$327,593,154 $356,501,778
NOTE: The balance sheet at December 31, 1993 has been derived from the audited
financial statements at that date.
See notes to condensed consolidated financial statements.
THE ANDERSONS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months
Ended March 31
1994 1993
REVENUES
Sales and merchandising revenues $218,766,849 $147,673,724
Other income 645,771 813,650
219,412,620 148,437,374
COSTS AND EXPENSES
Cost of sales and revenues 187,926,087 121,674,635
Operating, administrative and
general expenses 27,300,216 25,881,516
Interest expense 2,100,950 1,431,116
217,327,253 148,987,267
NET INCOME (LOSS) - Note B $ 2,085,367 $ (549,893)
Allocation of income (loss):
To general partner $ 28,938 $ (6,762)
To limited partners 2,056,429 (543,131)
$ 2,085,367 $ (549,893)
Income (loss) allocation per $1000 of
partners' capital:
Weighted average capital for
allocation purposes - Note C $ 54,901,354 $ 50,636,184
Income (loss) per $1000 $ 38 $ (11)
See notes to condensed consolidated financial statements.
THE ANDERSONS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months
Ended March 31
1994 1993
OPERATING ACTIVITIES
Net income (loss) $ 2,085,367 $ (549,893)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 1,878,894 1,713,448
Amortization of deferred gain (34,283) (93,309)
Minority interest in net loss of
subsidiaries (6,078) (3,118)
Payments to minority interests (222,052) (156,658)
Provision for losses on receivables,
investments and other assets 90,320 102,149
Gain on sale of property, plant and
equipment (227,730) (128,974)
Changes in operating assets and liabilities:
Accounts receivable 13,461,532 (9,242,185)
Inventories 20,258,206 (6,561,886)
Prepaid expenses (462,361) (718,895)
Accounts payable for grain (64,512,873) (33,081,604)
Other accounts payable and accrued
expenses 2,532,081 (5,637,257)
Other assets 67,333 72,339
NET CASH USED IN OPERATING ACTIVITIES (25,091,644) (54,285,843)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (2,302,893) (1,602,279)
Proceeds from sale of property, plant
and equipment 404,183 267,889
Advances to affiliates (665,000) (549,000)
NET CASH USED IN INVESTING ACTIVITIES (2,563,710) (1,883,390)
FINANCING ACTIVITIES
Net increase in short-term borrowings 25,500,000 58,050,000
Proceeds from issuance of long-term debt 5,562,215 5,409,255
Payments of long-term debt (3,088,201) (5,254,620)
Payments to partners and other deductions
from capital accounts (1,586,784) (888,293)
Capital invested by partners 733,675 -
NET CASH PROVIDED BY FINANCING ACTIVITIES 27,120,905 57,316,342
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (534,449) 1,147,109
Cash and cash equivalents at beginning of year 3,936,955 1,365,906
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,402,506 $ 2,513,015
Noncash Investing and Financing Activities:
Assumption of long-term debt in purchase
of property, plant and equipment $ 5,216,918 $ -
See notes to condensed consolidated financial statements.
THE ANDERSONS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of
the results of operations for the periods indicated have been made.
The accompanying unaudited condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Partnership's
annual report on Form 10-K for the year ended December 31, 1993.
Note B - No provision has been made for federal income taxes on the
Partnership's net income since such amounts are includable in the
federal income tax returns of its partners.
Provision for federal income taxes is made on the net income or loss
of the Partnership's corporate subsidiaries, but is insignificant.
Note C - The Partnership Agreement reflects each partner's invested capital
as of the beginning of each year. Partners' capital used in
determining the allocation of net income per $1,000 of partners'
capital is weighted to reflect cash distributions made to partners
during the year. The indicated allocations for the three-month
period ended March 31, 1994 and 1993 are the allocations which would
have been made had such period constituted an entire fiscal year.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources:
Partners' capital at March 31, 1994 was $56.6 million, up $1.2 million
from December 31, 1993. Net income in the first quarter added $2.1 million
to partners' capital and new equity of $734,000 was received at the beginning
of the year. Decreases to partners' capital included distributions to
partners of $983,000 and equity withdrawals of $604,000. Quarterly cash
distributions of approximately $325,000 are expected to be paid in June,
September and December of 1994. A final 1993 tax distribution of
approximately $932,000 was paid in April 1994 and a quarterly tax distribution
of approximately $685,000 was also paid in April. Additional quarterly tax
distributions of approximately $685,000 are expected to be paid in June and
September 1994 and January 1995. The remaining cash and tax distributions are
discretionary and can be discontinued or eliminated if operating results are
insufficient to warrant payment. Withdrawals of capital in 1994 are not
expected to be significant.
Short-term lines of credit were $117 million at December 31, 1993 and
were increased on a temporary basis to $142 million during the first quarter
of 1994. Typically, the Partnership's highest borrowing occurs in the first
quarter due to seasonal inventory requirements in several of the Partnership's
businesses, credit sales in the lawn products and agricultural products
businesses and a customary reduction in grain payables due to customer cash
needs and market strategies. The Partnership's liquidity is enhanced by the
fact that grain inventories are readily marketable. The Partnership's
short-term lines of credit were increased by an additional $10 million in
April. In management's opinion, the Partnership's liquidity is adequate to
meet short-term and long-term needs.
The Partnership is currently offering Five-Year and Ten-Year debentures
for sale. In 1994, through April 1, the Partnership sold $500,000 of new
debentures. The amount of proceeds to be realized for the full year 1994 from
the sale of the debentures is unknown since the offering is not underwritten.
Any proceeds realized will be added to working capital and used for such
purposes as the funding of current maturities of long-term debt and for
capital expenditures.
Capital expenditures totaled $6.4 million in the first quarter of 1994
and are expected to be approximately $26 million for the calendar year. In
the first quarter, a general store was purchased which had previously been
leased. A note payable of $5.2 million was assumed from the previous owner
to finance this purchase. Additional expenditures anticipated in 1994 include
$7 million for the purchase of a general store currently under lease and $1
million for the purchase of an agricultural products facilities subject to a
lease expiring in 1994. The Partnership expects to increase long-term debt
by $15 million to fund the additional capital expenditures and part of the
proceeds from this debt will be added to working capital. If the additional
long-term debt and cash generated from operations is not sufficient, capital
expenditures will be curtailed.
Results of Operations:
Net income in the first quarter of 1994 was $2.1 million, a sixteen year
first quarter high for the Partnership. In the first quarter of 1993 the
Partnership experienced a loss of $550,000. Sales and merchandising revenues
were $219 million, up from $148 million a year ago. Interest expense was up,
due to an increase in short-term and long-term debt and higher interest rates.
Operating, administrative and general expenses were up 5.5%, with most of the
increase coming from expanded operations including a new general store opened
in the fall of 1993.
Sales in the grain area were $127 million in the first quarter of 1994,
up $49 million from a year ago. The average selling price was $4.04 per
bushel up from $3.13 per bushel in the first quarter of last year. The number
of bushels sold increased by about 25%, while margins were down. The income
earned from holding owned grain decreased by $700,000 from the extremely high
level of income experienced in 1993. Drying and mixing income also decreased,
but again the income earned in the first quarter last year was higher than
normal. Storage income was up in the first quarter and this trend should
continue into the second quarter as bushels held in storage at the end of the
quarter were double that of a year ago. Overall, merchandising revenues were
about even with last year and gross profit from the grain area was also about
even with the first quarter of 1993.
In the agricultural products area, sales were $28 million, up $10
million from a year ago. Wholesale sales of fertilizer products accounted for
almost all of the sales increase. Volume was up almost 50% and average
selling prices were up 5%. As a result of the increase in selling prices and
a decrease in material costs, margins were also up in the first quarter of
1994. Retail sales were up and sales of agricultural supplies were about even
with last year. As a result of the increased volume and margins from
wholesale sales, gross profit on sales of agricultural products was up 68% for
the quarter.
Sales in the retail area were $31.6 million in the first quarter of 1994
compared to $25.4 million last year. Sales in the Columbus market were up 13%
and sales in the Toledo market were up 2%. The new store in Lima, Ohio,
accounted for the remainder of the sales increase. As a result of the sales
increase and an increase in margins, gross profit in the retail area was up
28%.
Sales of lawn care products were $16 million, up $4 million from the
first quarter of last year. Tons sold increased by about 45%, while average
selling prices decreased by about 8%. Gross profit was up 25%, due to the
volume increase. In the industrial products area sales were down about 3%
from the first quarter of 1993 and volume was down about 10%. Gross profit
was down 14%, due to the volume and sales decrease. In the other businesses,
sales were up due to a sale of railcars in the first quarter of 1994 and an
increase in sales in the Partnership's auto service centers. Gross profit in
the other businesses was up about 25%.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K. There were no reports on Form 8-K for the
three months ended March 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE ANDERSONS
(Registrant)
By THE ANDERSONS MANAGEMENT CORP.
(General Partner)
Date: May 13, 1994 By /s/Richard P. Anderson
Richard P. Anderson
President and Chief Executive
Officer
Date: May 13, 1994 By /s/Richard R. George
Richard R. George
Corporate Controller (Principal
Accounting Officer)
